Kansas is 5th state where lottery prizes may have been fixed

Iowa City, Iowa  The former security chief for a national group that operates state lotteries personally bought two prize-winning tickets in Kansas worth $44,000, investigators said Monday, bringing to five the number of states where he may have fixed games to enrich himself and associates.

Investigators recently linked the winning 2010 Kansas tickets to Eddie Tipton, former security director of the Multi-State Lottery Association, Iowa assistant attorney general Rob Sand disclosed in court documents. The evidence will show that Tipton associates who claimed the prizes returned half of the money in cash directly to him in early 2011, he wrote.

Tipton allegedly purchased two winning tickets to the "2by2" game at separate locations while traveling through Kansas on business in December 2010, the Kansas Lottery said. Each was worth $22,000, the prize for any player with the day's winning numbers, and were allegedly passed on from Tipton to individuals from Iowa and Texas who claimed them, the lottery's statement said.

In his job at the association managing lotteries for 37 states and territories, Tipton managed random number generators that pick winning numbers for some national games such as Hot Lotto and games played in individual lotteries.

Kansas Lottery officials said they were asked to look into the 2010 tickets by Iowa investigators earlier this month. Any alleged fixing happened at the association headquarters in Urbandale, Iowa, where "2by2" is administered and drawn, they said.

"The Kansas Lottery had no way of knowing that Mr. Tipton was purchasing these tickets, nor that any manipulations of the (random number generator) in Iowa might have occurred," Kansas Lottery executive director Terry Presta said.

The Kansas Attorney General's Office has launched a criminal investigation.

As a lottery vendor, Tipton was barred from playing the lottery.

Prosecutors believe that Tipton, 52, used his access to the machines to surreptitiously install software programs that let him know the winning numbers in advance before disappearing without a trace. They say he worked with associates such as his brother Tommy Tipton — a Texas judge — and Texas businessman Robert Rhodes to play those numbers and collect prizes dating back to 2005.

Earlier this year, a jury convicted Tipton of fraud for fixing a $16.5 million Hot Lotto jackpot dating back to 2010. He was sentenced to 10 years in prison but is free while he appeals.

After fixing the winning combination, Tipton went to a gas station near the lottery association to buy those numbers and then passed the winning ticket to Rhodes, who unsuccessfully tried to collect the prize with associates, prosecutors say. Rhodes is fighting extradition back to Iowa to face charges in the case.

Since Tipton's conviction, Iowa prosecutors have charged Tipton with ongoing criminal conduct and money laundering for allegedly fixing jackpots valued at $8 million in Colorado, Wisconsin and Oklahoma. The Kansas jackpots were added to the charges Monday.

Tipton's attorney, Dean Stowers, laughed out loud when told of the latest allegations against his client. He repeated his contention that there is no evidence that Tipton tampered with the computers, and argued that any charges related to old jackpots should be barred by the three-year statute of limitations. Sand is fighting Tipton's motion to dismiss the case on that ground, saying the additional jackpots were only recently discovered.

Stowers said the new information was a publicity stunt to bring more attention to the case, which is set for trial next month but could be delayed.

"If you look at what they are claiming they have found after the first trial, you would think these investigators must be completely incompetent," he said.

Stowers said that arguing the games were rigged was a risky strategy for state lotteries.

"If that's their claim, what is their obligation to the players? Obviously they were running games that weren't legitimate and collected all this money from people and spent it," he said.